Also while there is no guarantee rents will continue to increase in the future I believe there is a good chance they will. 

True, converting a personal Schedule E to a partnership will indeed reduce your IRS audit chances, statistically speaking.

these can produce good returns but best chance for success is for those that have experience in this area (I am a partner on an effort adding 8 ADUs, but it is not performing to the initial underwriting (underperforming) and it is an experienced team).good luck I get it, but not everyone has the opportunity of scale and building multiple units.

However, chances of making a mistake or overlooking an opportunity to save are higher when it comes to rentals.The dilemma is whether it's worth paying a professional in this case.

Haven’t had a chance to research STR permits in Sac yet but writing offer for a unit today.   

The program is neither good nor bad, there's just different pros & cons compared to cash paying tenants.Have offered to schedule a call with you numerous times to try and assist you, but you seem to prefer posting & posting & posting - which will take so much longer:(What are the chances you'll actually invest someday, given how long it's taking you to do basic research?

I've been working with a mortgage broker but haven't had the chance to talk with him about this as an option yet.

If they can afford to stay, chances are they need to refinance and get the X name off the loan.   

Most likely the new lender is going throught the foreclosure process and typically will end up taking the property back.The original posters chances of getting this property back now is slim to none as it will be sold at market value.  

This specific tenant is in a program so the longer they take to send me the document, the chances of issues coming about is higher.